If you think that Brexit problems can create havoc within the economy of the United Kingdom, you do not have to think twice, because if things go the way the people have planned, everything will become more unpleasant than it is.
We have seen that Northern Ireland border shifted their attention and focus due to costs of Brexit, which will leave a bad deal to all of them. In time, people will see the Brexit effects in the economy. The problem is complicated because according to economic analysis, the predictions are that they will enter the recession.
Britain has notgone there yet, but employment is continuing to fall,and today it is at 4.3% which is the lowest amount since the ’70s, and no one has come with the plan that will affect this particular problem.
The fall of the pound is another thing that changed, and when it comes to Irish border, the largest employer from Northern Ireland, Bombardier, stated that they would oppose moving especially if the customs shift.
Economic disruption will affect the growth, and when we have in mind that in 10-year view, will affect other economic factors. This particular economic shock happened back in the ’70s when the Organization of Petroleum Exporting Countries increased the wealth of oil producers but created a reverse for the world.
The more significant shock will increase the loss of output,and the collapsewill affect both exports and imports.
Difference between Soft and Hard Brexit
Of course, we are not saying here that things will be as during World War II, but still, there will be a significant loss of output that will create recession and reduce the overall expenses. Even though this is important, the shock can last a few years, and Britain economies are adjusting to flexible currency and regulations that are changing along the way.
On the other hand, hard Brexit would change the way import and export functions and the exchange of rate can take the strain,and since the world became competitive, the manufacturing confidence will fall.
Since the clock is ticking down, the Parliament has decided to agree to a proposed deal that Theresa May created. Now we see two perspectives and two different outcomes that could happen in the next decade.
If you want to learn more on Brexit and its effects on entire world, we recommend you to check here.
These two different terms refer to a relationship that the United Kingdom will have with countries from the union. The idea is to remain within a single market, which involves a free movement of goods, of people and services as well as Customs Union that will provide you tax agreement and bloc’s trade.
Most supporters’ favorite the soft version of Brexit, while hard one would have a completely radical change that will affect both economy and the future of people that are living within Britain.
Let us differentiate these two terms so that you can understand them completely:
The main idea is that the UKremains closely connected and aligned with the European Union. That way, they would have the ability to gain access to a free market, but in return, they will have to make an appropriate compromise on immigration agreements, which was the main reason for the referendum.
The primary goal is to minimize the impact on businesses and trade, which will mean that the UK will remain within the regulations and rules of the customs union. As a result, the UK would have to follow specificrules of the union, but they will not have saying in the future amendments and regulations.
Therefore, it would be more challenging for Britain to sign new deals as before, but they would still have the free market and employment rate would not change the same way as it would with hard Brexit.
This is the most radical choice that Britain could make because it would mean a complete out card out of the European Union (visit their official website: https://europa.eu/european-union/index_en), which would affect both customs union and single market share. That way, businesses that are from Britain would not have free tariffs and regulations as with soft one.
Of course, that will provide the UK a more significant control when it comes to immigration and its borders. However, it would mean that they have to leave both customs union and single market and to accept only short-term disruptions that will allow them to operate freely as before.
That would create enormous economic damage to the entire Kingdom, and that would create massive problems, but supporters state that this downfall will result in independent trade agreements that Britain could make with countries outside of the union.
What will happen, we can only watch and analyze, but according to the Prime Minister, she intends to take the control back over borders and regulations, which may lead to hard Brexit.
On the other hand, she also stated that there should be a transitional period in which the UK would still have the same regulations and rules as it were in a union.